Jim O’Neill, former Chairman of Goldman Sachs Asset Management and former UK Treasury Secretary, is a member of the Pan-European Commission on Health and Sustainable Development.
The 22nd World Cup is underway, but who would have thought at the beginning of this century that it could be hosted by little Qatar? Yet here we are, and the only surprise is that it doesn’t feel all that amazing.
For much of my professional career, I have explored the links between the beautiful game and the global economy. At Goldman Sachs and, before that, at Swiss Bank Corporation, I indulged in my dual obsessions by presiding over special publications unique to each World Cup from 1994 to 2010. After one, I received personal messages from top central bankers around the world. world. . Some told me it was the best post we ever produced, which, given how often we post about economic events and markets, was fun and food for thought. We convinced national leaders and top soccer figures to guest write for us. Alex Ferguson, the legendary manager of Manchester United, once selected his best world team of all time.
To date, I have managed to attend six World Cups, hosted by the United States, France, South Korea and Japan, Germany, South Africa, and Brazil. From these experiences, I can add my voice to those who describe the event as one of the most beautifully inclusive gatherings of many different nationalities and cultures. The advent of Fan Zones, which really took off after the 2006 World Cup in Germany, embodied this spirit, although I experienced it most intensely in Seoul in 2002.
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The link between soccer and the state of the world economy is evident in the choice of tournament hosts. I think it is an inescapable fact that the FIFA selection of South Africa in 2010, Brazil in 2014, Russia in 2018 and now Qatar was based on the steady rise of so-called emerging economies over the first two decades of this century. I have long thought that the other two BRICS countries (a group made up of Brazil, Russia, India, China and South Africa) might well join the small group of hosts in the future.
But given the inward turn of many major countries in recent years, are the days numbered to want to host the event? Will aspiring emerging nations find it increasingly difficult to succeed in hosting the world’s most-watched tournament? Or, on the contrary, could the world soon return to a more contained, globalizing and inclusive international order? One could even ask a deeper question: is FIFA a leading or lagging indicator of the world economy and the degree of globalization?
I suspect that the progress of the competition over the next four weeks, and more importantly how many of us watch the matches, could be the clearest early sign of the broader significance of this year’s World Cup. The competition has been the backbone of FIFA’s revenue. There is already talk, probably motivated by the desire of professional clubs to earn even more revenue, to make the tournament a biennial event, or to supplement the current quadrennial format with a club-based quadrennial competition.
If the future of the global economy is very different to that of the last 20 or 30 years, this will be reflected in FIFA’s decision-making. It’s hard to imagine FIFA being excited about future competitions in emerging market countries if these countries contribute less to global economic growth than the hosts of the tournament since 2010.
In the 1980s, 1990s, 2000s, and 2011-20, world real GDP growth averaged 3.3%, 3.3%, 3.9%, and 3.7%, respectively. The acceleration over the past two full decades was clearly driven by further growth in the emerging world, and coincides with the period when FIFA began selecting hosts outside of soccer’s traditional strongholds. It currently appears that this trend could be reversed within this decade, even with eight years to go.
And the winners this time? Thanks to the popularity of posts I’ve produced in the past, I’ve learned not to go beyond predicting the four semi-finalists. On the one hand, the same realism with which one must approach economic forecasts also applies to the World Cup; on the other hand, the leaders of the countries we did not propose to win often did not take it very well.
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I start with the story. Only eight countries have won the World Cup. Brazil, who have won five times, are always one of the favourites, and this year’s team looks to be one of the strongest in the tournament. Argentina, Uruguay, France, Germany, Italy, Spain and England are the other previous winners. Although Italy did not qualify this time, the winner is likely to be one of the others.
One of these years England will win it again, but it could easily be any of the previous winners. Among the rest, Denmark, the Netherlands and Portugal tend to exceed their economic and population weight. Whoever wins, I’ll be watching for all sorts of signs about the future, as I always have.
This article was published by Project Syndicate